The Meaning and Calculation of Unemployment

Slides:



Advertisements
Similar presentations
Unemployment and Inflation The evil twins of the Macroeconomy.
Advertisements

Unit 6 Unemployment Top Five Concepts
NEDARBAS (UNEMPLOYMENT)
LABOR FORCE Ch. 12 Notes. Labor Force Make-Up  Made up of:  people 16 or older  Civilian  Uninstitutionalized  who want a job or have one  Can be.
 The unemployment rate = the percentage of the labor force that is jobless and actively looking for work Based on a country’s labor force, not the entire.
MACROECONOMICS Unit 4 Unemployment Top Five Concepts.
1 of 35 chapter: 8 >> Krugman/Wells ©2009  Worth Publishers Meaning and Calculation of Unemployment.
Economics Unit 6, Lesson 3©2012, TESCCC. Objectives Define unemployment Describe the different types of unemployment Describe how full employment is measured.
UNEMPLOYMENT. UNEMPLOYMENT IN AMERICA Unemployment As of September 2007 IN THE WORKFORCE: 153,446,000 EMPLOYED: 146,251,251 UNEMPLOYED: 7,207,000 NOT.
Unit 2: Macro Measures and International Trade 1.
The unemployed are searching for/available for work (4 weeks) Employed + Unemployed = Labor force Labor force participation rate =Labor force X 100 Population.
Economics Unit 6, Lesson 3©2012, TESCCC. Objectives Define unemployment Describe the different types of unemployment Describe how full employment is measured.
To be considered Unemployed….. 1. must be 16 yr old of age or older 2. must have been currently looking for employment in past 4 weeks 3. still have not.
Unemployment Labor force – Anyone 16+ that is willing and able to work (students, housewives and retirees either not willing or not able to work)
Employment  The number of paid workers in population.
Unemployment Game- youtube clip READ.  The unemployment rate is the percent of the civilian labor force that is without jobs, but ACTIVELY looking for.
1 Chapter 12 Business Cycles and Unemployment Key Concepts Key Concepts Summary ©2000 South-Western College Publishing.
Chapter 5: Monitoring Jobs and Inflation
HBC608 ECON203 Principles of Macroeconomics Week 5 Topic: JOBS (EMPLOYMENT) versus UNEMPLOYMENT HBC608HBC608 ECON582 Dr. Mazharul Islam Finance NotesFinance.
Business Cycles and Unemployment
Unit 2: Macro Measures 1 Copyright ACDC Leadership 2015.
Business Cycles & Fluctuations
MODULE 14 (50) Categories of Unemployment
Unemployment.
Unit 2: Macro Measures 1 Copyright ACDC Leadership 2015.
Unemployment 13.1 Why should our nation be concerned about unemployment? Gauges the economic health of a country by tracking the number of people who are.
AP MACRO ECONOMICS MR. SUTHERLAND
Unit 2: Macro Measures 1 Copyright ACDC Leadership 2015.
Macro Measures and International Trade
MODULE 12 The Meaning and Calculation of Unemployment
Types of Unemployment.
Business Cycles and Unemployment
Unit Two Unemployment.
Unemployment vs Employment
Unemployment.
Unit 2: Macro Measures 1 Copyright ACDC Leadership 2015.
Challenges to the Free Market System
Unit 2: Macro Measures 1 Copyright ACDC Leadership 2015.
Section 3 Module 12.
Unit 2: Macro Measures 1 Copyright ACDC Leadership 2015.
Module The Meaning and Calculation of Unemployment
UNEMPLOYMENT INTEREST RATES
4-Types of Unemployment & Full Employment Theory
Measurement & Analysis
Business Cycles and Unemployment
Unemployment AP Macroeconomics.
Facing Economic Challenges
Unit 2: Macro Measures 1 Copyright ACDC Leadership 2015.
Types of Unemployment.
Types of Unemployment.
The Meaning and Calculation of Unemployment
Unit 2: Macro Measures 1 Copyright ACDC Leadership 2015.
Unit 2: Macro Measures 1.
Unemployment.
Unemployment.
Unemployment Chapter 6 McGraw-Hill/Irwin
Unemployment and Inflation
1.
Unemployment.
The Natural Rate of Unemployment
The Meaning and Calculation of Unemployment
Unit 2: Macro Measures 1 Copyright ACDC Leadership 2015.
Unemployment 13.1 Why should our nation be concerned about unemployment? Gauges the economic health of a country by tracking the number of people who are.
1.
Unemployment.
Introduction to Unemployment
CHAPTER 11: ECONOMIC CHALLENGES
Unemployment 1.
Unit 2: Economic Indicators and the Business Cycle
The Meaning and Calculation of Unemployment
Presentation transcript:

The Meaning and Calculation of Unemployment

The Unemployment Rate

Defining and Measuring Unemployment Employed working Unemployed to be without work and to be actively seeking employment Unemployment rate Percentage of people in the labor force who are unemployed

Defining and Measuring Unemployment Labor force the sum of the employed and the unemployed. Labor force participation rate the share of the working-age population in the labor force Unemployment Rate The number of unemployed workers in the labor force

UNEMPLOYMENT Measurement of Unemployment, 2009 Under 16 and/or institutionalized 71,400,000 Not in labor force 81,700,000 Total Population 307,300,000 Employed 139,900,000 Labor force 154,200,000 Unemployed 14,300,000

Problems with the Unemployment Rate Unemployment may be overstated due to people waiting to take jobs even though jobs available. Unemployment may be understated due to discouraged workers, marginally attached workers and the underemployed.

Problems with Unemployment Rate Discouraged workers: those who have become so frustrated and stopped looking are no longer considered unemployed Marginally attached: those who have looked recently but are not currently looking Underemployed. Those who work minimally (at least one hour) are considered employed. Also many people take jobs below their skill level. http://www.bls.gov/news.release/empsit.t15.htm

Meaning of Unemployed

Who’s Employed and Who’s Not Classify each of the following individuals as EMPLOYED, UNEMPLOYED or NOT IN THE LABOR FORCE Steve worked forty hours last week in a music supply store. Sergio, a classically trained musician, can only find work playing for local parties. Anthony, a schoolteacher, is not working during his three-month summer break.

Renee lost her job at the R-Gone Manufacturing Company Renee lost her job at the R-Gone Manufacturing Company. After searching for 6 months, Renee gave up looking last month. Natasha, a graduate student, went back to school because jobs were scarce. Raj is taking a year off from work to stay home with his daughter. Raj’s father is unable to work.

Scott has a Ph.D.. He worked full-time but doesn’t like his job as a dishwasher. Mary-Helen has been out of work for a full year. She was looking for a job up until last month. She is not actively searching for work right now.

Variations in Unemployment Rates Work easier to find in “prime” age group of 25-54 Teenagers and minority groups have the highest unemployment rates

Types of Unemployment Frictional unemployment is also known as job search unemployment These people are temporarily between jobs. (ex: recent graduates, those who have relocated, those looking for a better job) These people have skills and there are jobs available for them Seasonal unemployment (subset of frictional unemployment) workers who due to weather or other variations are not working presently

Types of Unemployment Structural unemployment involves mismatches between job seekers and job openings at current wage rate. Causes People lack skills demanded (technological innovation) Minimum wage laws Labor unions Efficiency wages Side effects of public policy

Types of Unemployment Cyclical unemployment is caused by recessions. People aren’t buying goods so workers are laid off.

Types of Unemployment Decide which of the following types each scenario describes: frictional, seasonal, structural or cyclical A Wisconsin construction worker cannot find work in the winter A steelworker is laid off because of a long recession A computer programmer quits her job in Chicago to look for a new job in San Diego A store clerk loses her job because sales are slow during a business slump

A high school dropout applies for several jobs but is told each time that he is not qualified. An unemployed college senior is looking for her first job. An unemployed auto worker has been replaced by a robot. A person rejects a job offer because the wage is too low.

Full Employment Rate a.k.a. Natural Rate of Unemployment It is the lowest possible unemployment rate with the economy growing (maximum potential employment) . It takes into account unavoidable unemployment such as structural and frictional, but not cyclical. It is considered to be about 5% unemployed. If the current unemployment rate is 8.3%, how much is due to cyclical unemployment?

Changes in the Natural Rate of Unemployment The natural rate of unemployment changes over time and across national borders.

Changes in Natural Rate of Unemployment Causes Changes in labor force characteristics Experienced vs inexperienced workforce Changes in labor market institutions Labor union membership Temp employment agencies and online job search Demand for skilled vs unskilled labor Changes in government policies Income security vs job training